Research

How to vet potential tenants during a showing.

I have had all manner of tenants in the past, good and bad. With experience, I have developed a successful application process that helps me to find the best possible tenants. After the successful first phone call, now it is time to schedule the showing.

2015-09-01

By Kathryn K. Eaton Clinical Assistant Professor of Marketing   I have had all manner of tenants in the past, good and bad. With experience, I have developed a successful application process that helps me to find the best possible tenants. After the successful first phone call, now it is time to schedule the showing. Remember when I said that it's a good idea to have a strong relationship with tenants? This good relationship can help out here — I’ve always had luck with current tenants allowing me to show the house while they still live there. There are some pros and cons to doing this, however. One of the benefits is that if you can get the property re-rented while the current tenants are still in there you won't lose a month of rental income between tenants. This is huge if you're not in a position to make two mortgage payments in a single month. One of the drawbacks, however, is that you are at the mercy of your current tenants. If they aren't great housekeepers, the property isn't going to show well, which will make it harder to rent. If you can, it's a good idea to walk through the house yourself before showing it to anyone. You will also need to coordinate the timing of the showings with the current tenants, and if their schedule is odd, it may be difficult to show the house. Open communication and cooperation between you and the current tenants is key to making this work. When it comes to scheduling with the prospective tenants, I try to be as accommodating as possible. You want to get as many qualified people to look at the property as you can, because that's going to increase your chances of finding a good match. As I walk the tenants through the property, I try to point out some of the features of the home that they might not notice (big closets, cleverly placed outlets, etc). I also use the time to discuss other benefits of the property, like the included appliances, access to community pools or school information. I try to tailor this discussion to the prospective tenant. Elderly retirees probably won't care that the elementary school has a great rating. This is also a good time for you to get a feel for the tenants. If at all possible, I try to get a glimpse of their car. The condition of their vehicle can give you a clue as to how well they might take care of the property. If the car is full of trash and stains, chances are the house would look the same in no time. Finally, I like to get to know the tenants themselves. I see the rental arrangement as a relationship, and I want us to be able to get along. Are they going to be polite when there's a maintenance request, or are they going to make my life difficult? Are they going to work with me when it comes time to move out? These interpersonal considerations are important so that being a landlord doesn't make you miserable. — "Getting Started" is an entrepreneurship column by the faculty of the W. P. Carey School of Business at Arizona State University. Kathryn K. Eaton is a clinical assistant professor of marketing at the W. P. Carey School of Business. Her areas of expertise include consumer behavior, product and service design and health care innovation. First published, August 31, 2015.

Entrepreneurship Management Real Estate